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 Taking advantage of Section 179 of the Tax Code could put more money in your pocket.

Did you know Section 179 can provide you with significant tax relief for this 2017 tax year, but equipment must be financed and in place by midnight December 31, 2017.

Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year up to $500,000. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. It’s an incentive created by the U.S. government to encourage businesses to buy equipment and invest in themselves.

 What does it mean for an operator?

The depreciation of equipment is used in conjunction with your other business expenses to minimize the amount of net income that your business will show for tax purposes. It might make sense to get more equipment purchased and into the field now before the year ends. Equate it to when you clean closets out in November and take 45 bags of old clothes to Goodwill or the DAV. That way you can take the donation off your income taxes for the year.

Depreciation is an expense that is allowed by the IRS, you do not have to feel guilty for taking it. You just need to make sure you are taking it properly and that is why you keep a tight relationship with your accountant to make sure you are taking and getting all the allowable deductions for your business. Section 179 might not be for you. It might be better to use a different aspect. Different businesses have different ways to look at it. That is why you need to talk to your accountant. More often than not, working with an accountant will offset their costs (preparation costs) in the knowledge they know and can apply to your business tax returns. This is especially true for differences that you need to follow with respect to State and Federal laws.

For more information on Section 179 visit www.irs.gov

 

 

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